Passage I: Formation of the WTO

The World Trade Organization (WTO) was formed in the early 1990s as a component of the Uruguay Round negotiation. However, it could have been negotiated as part of the Tokyo Round of the 1970s, since that negotiation was an attempt at a 'constitutional reform' of the General Agreement on Tariffs and Trade (GATT). Or it could have been put off to the future, as the US Government wanted. What factors led to the creation of the WTO in the early 1990s?

One factor was the pattern of multilateral bargaining that developed late in the Uruguay Round. Like all complex international agreements, the WTO was a product of a series of trade-offs between principal actors and groups. For the United States, which did not want a new organization, the dispute settlement part of the WTO package achieved its longstanding goal of a more effective and more legal dispute settlement system. For the Europeans, who by the 1990s had come to view GATT dispute settlement less in political terms and more as a regime of legal obligations, the WTO package was acceptable as a means to discipline the resort to unilateral measures by the United States. Countries like Canada and other middle and smaller trading partners were attracted by the expansion of a rules-based system and by the symbolic value of a trade organization, both of which inherently support the weak against the strong. The developing countries were attracted due to the provisions banning unilateral measures. Finally, and perhaps most important, many countries at the Uruguay Round came to put a higher priority on the export gains than on the import losses that the negotiation would produce, and they came to associate the WTO and a rules-based system with those gains.

A second factor in the creation of the WTO was pressure from lawyers and the legal process. The dispute settlement system of the WTO was seen as a victory of legalists over pragmatists but the matter went deeper than that. The GATT, and the WTO, are contract organizations based on rules, and it is inevitable that an organization created to further rules will in turn be influenced by the legal process. Legal development can be defined as promotion of the technical legal values of consistency, clarity (or, certainty) and effectiveness. As it played out in the WTO, consistency meant integrating under one roof the whole lot of separate agreements signed under GATT auspices; clarity meant removing ambiguities about the powers of contracting parties to make certain decisions or to undertake waivers; and effectiveness meant eliminating exceptions arising out of grandfather-rights and resolving defects in dispute settlement procedures and institutional provisions.

What could be the closest reason why the WTO was not formed in the 1970s?

The most likely reason for the acceptance of the WTO package by nations was that

According to the passage, WTO promoted the technical legal values partly through

In the method of interpretation of the European Court of Justice,

In the statement "... it amounted to a recognition that international trade and its benefits cannot be enjoyed unless trading nations accept the discipline of a negotiated rules-based environment", 'it' refers to

The importance of Cassis de Dijon is that it